{"id":3869,"date":"2019-04-02T16:08:28","date_gmt":"2019-04-02T16:08:28","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=3869"},"modified":"2022-09-05T15:59:40","modified_gmt":"2022-09-05T15:59:40","slug":"thresholds-for-automatic-settlement-of-customer-deductions","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2019\/04\/thresholds-for-automatic-settlement-of-customer-deductions\/","title":{"rendered":"Thresholds for Automatic Settlement of Customer Deductions"},"content":{"rendered":"

Introduction<\/strong><\/span><\/p>\n

For customer payments, many companies allow short payments from customers<\/a> to automatically settle outstanding invoices, assuming they do not exceed a pre-established threshold.\u00a0 They have justified this threshold as the funds which may be recovered by lowering or eliminating the short-payment have been more than offset by the additional costs required to administer collection.\u00a0 Based on a review of how short payments are typically resolved, if in the overwhelming percentage of cases they are resolved in the customers\u2019 favor<\/a>, unless there is sufficient benefit to a root cause analysis to improve underlying work processes, establishing a meaningful threshold is probably a very good idea.<\/span><\/p>\n

iPollingTM<\/sup> Results Review<\/strong><\/span><\/p>\n

Recently a Peeriosity iPollingTM<\/sup> question was created to better understand how prevalent tolerance thresholds are for customer deductions, and when thresholds are utilized, the relative dollar amount that is used.\u00a0 The results indicate that 94% of member companies have implemented and are using a tolerance threshold that allows for short payments from suppliers to automatically settle outstanding invoices without intervention or special approval<\/a>, with the remaining 6% of member companies in the process of implementing tolerance thresholds.\u00a0<\/span><\/p>\n

\"iPolling:<\/p>\n

The actual amount of the threshold varies, with 80% setting an amount at or below $50 USD, and half of those in the range of $21 to $50 USD. An additional 13% have a threshold between $51 and $100, with 7% having a much higher threshold.<\/span><\/p>\n

\"iPolling:<\/p>\n

Here are some of the comments from responding companies that provide insight into the approach member companies take to these types of transactions:<\/span><\/p>\n